After the loss of a £3.5bn contract to build trains for a new rail infrastructure upgrade, Derbyshire-based Bombardier has said that it will now review its business presence in the UK.
The contract to manufacture 1,200 train carriages was instead awarded to Siemens which the government said had offered a better deal for the UK taxpayer. The trains will come into service on the north-south cross-London route from 2015. The route, reopened under British Rail in the 1980s, has been one of the UK’s most overcrowded and the introduction of Siemens’ 12 carriage long trains will allow for a better service to be provided.
The UK Minister for Transport, Theresa Villiers, said in statement to the BBC last week that she appreciated employees at Bombardier would be disappointed on losing out to Siemens, but assured that although the trains would be built in Germany, the contract would still create up to 2,000 jobs in the UK, including 600 component manufacturing positions and 650 jobs needed for the building of two new depots to house and maintain the trains.
A spokesman for Bombardier told the BBC: “I can confirm that Bombardier will be conducting a full review of its operations. We have told our staff that we realise that this is a period of uncertainty and we will try to ensure that the review is conducted as soon as we can. However, we are not issuing a time scale. It’s important that this review is conducted thoroughly. Some tough decisions would have to be made,” he added.
Derby North MP Chris Williamson said the decision was ‘crass’, and called it “economic vandalism’ in a statement to the BBC. “You can’t say you support manufacturing industry, want to help rebalance the economy, if you’re going to allow a company like Bombardier potentially pull out of this country as a result of a crass decision that was announced last Thursday,” he said.
Bombardier immediately announced a review of its operations in Derby, which employs around 3,000 people from the Derby city area. In total, Bombardier employs around 5,000 people in the UK. Unite, the union called the decision a “hammer blow” for Derby and for British manufacturing.
Philip Hickson, Derby City Council leader said to the BBC: “The news will undoubtedly have implications for its Derby operation and workforce and for the companies in their supply chain. We will, of course be asking for an immediate meeting with the Prime Minister, to put forward Derby’s case. We have long been one of the powerhouses of the UK economy, as evidenced by David Cameron bringing his cabinet to Rolls-Royce only last March.”
Bombardier’s Derby factory has swung since the mid-1990s rail privatisation from near-idleness to being over-stretched, amid sharply varying levels of train orders. It is currently building new trains for London Underground’s sub-surface lines and in 2009 won an order for 30 new trains for East Anglia . But its defeat in both the Inter City Express high-speed train programme and Thameslink is likely to raise questions about its long-term viability.